Q&A with the 2023-2024 Chair of SIFMA’s Board of Directors

SIFMA is both a purpose- and a member-driven organization. By fostering market resilience and strong financial futures, we support our members as they strive to make a positive impact on society.

Recently, SIFMA president and CEO Kenneth E. Bentsen, Jr. sat down with Ken Cella, Principal and Head of External Affairs for Edward Jones and 2023-2024 Chair of SIFMA’s Board of Directors. They discussed SIFMA’s commitment to fostering effective and efficient capital markets, our role on behalf of the membership, and the goals we have set out to achieve under the direction of our leadership.

 

The following conversation has been edited for clarity.

Ken Bentsen: You’ve been active with SIFMA for a number of years now, and we thank you for that. Given your experience with the association, how do you think about SIFMA and its role?

Ken Cella: As the voice for the U.S. securities industry, SIFMA is both a purpose- and member-driven organization. SIFMA supports our members and fosters the development of market resilience and financial independence. It’s important work, with many different priorities to focus on. In practical terms, to me that looks like advocacy, action and access.

Ken Bentsen: Great starting point. Let’s delve into those three words more deeply.

Ken Cella: Let’s start with advocacy: SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services.  We know we are operating in unprecedented times, with multiple and sometimes repetitive regulatory considerations. Regulators should ensure their rules keep pace with markets, but transformative changes must be thoughtfully crafted and fully vetted for indirect costs and cumulative effects, particularly at a time of economic stress and uncertainty. We are strong advocates for that.

Then, there’s action: In addition to regulatory challenges, we are experiencing geopolitical matters that span the globe from Israel to the Ukraine and right here in our home country. We’ve seen volatility across the capital markets, and technology is also evolving as we consider, for example, the impact of AI on our industry. While this complex economic backdrop is our reality, we also know this moment is ripe with opportunities. We have an opportunity as leaders across our industry to help navigate these challenges for our clients in the near term while remaining steadfastly focused on the long term.

And third, access: It is imperative that we focus on financial literacy. Our society has an urgent need to increase financial literacy, an issue that has broad implications for our economy, our communities, and our democracy. At SIFMA, we are committed to tackling this issue from the ground up, empowering the next generation with an understanding of the markets, economy and foundational financial habits that can last a lifetime.

Ken Bentsen: You and I had a one-on-one conversation as part of SIFMA’s Annual Meeting at the start of your term as SIFMA Chair, and you gave an update at our State of the Industry Briefing a few months later. Now that you’re halfway through your year as Chair, how are things going?

Ken Cella: It’s been a great six months, Ken. Keeping in mind our clients’ needs and considering the market and geopolitical conditions, my focus as Chair has been on three primary areas:

First, to reinforce the value of financial advice and help individual investors achieve their long-term goals by providing high-quality advice, products and services. This is at the core of what our industry does.

Second, to make sense of the regulatory and policy environment for our clients and be purpose-driven while making innovative business investments. This is to fulfill our individual purposes, serve our clients, and create a positive impact on society. We have spent a great deal of time focused on the SEC regulatory agenda, providing feedback from our members to regulators to help ensure regulations make sense. Take the equity market structure proposals, for example. Our advocacy there has been focused on ensuring our markets remain efficient and that costs are low to investors, so accessibility remains high. The cost of investing in equities has never been lower for a retail investor, and the ability for companies to list never easier

And third, to embrace this moment as an industry to help more people build a strong financial foundation to be resilient, secure and successful in the future. For example, at Edward Jones, we’ve set an ambitious goal to reach one million learners by 2025 through our financial education resources – and as of today, we are less than 100,000 learners away from reaching that goal.

These three primary areas demonstrate my commitment to our industry, and speaking with my Edward Jones hat on, that focus allows us to make informed decisions through a purpose-driven lens. And of course, while these are my core objectives, they are flexible in terms of current events that take priority.

Ken Bentsen: That’s a good point. What have you seen, and what are you seeing today that will shape the next six months of your term?

Ken Cella: As I mentioned earlier, we are seeing regulatory, economic and geopolitical issues which impact our markets and our business. Each of those factors present stress points, but they also present opportunity.

We will continue our focus on elevating and bringing into focus the client-centric, purpose driven work of our firms and their core importance of helping clients achieve their financial goals – whether those clients are everyday Americans and individual investors or institutional investors, governments, and corporations. Our role in the industry is to bring together our members to formulate, respond and advocate on critical business and public policy affecting the retail and institutional capital markets, and the clients our members serve. We accomplish this by advocating for effective and efficient capital markets on behalf of our members.

What I think is universally true for SIFMA member firms is this – client needs are changing, whether it’s complexities associated with planning for retirement, risk management in a period of market volatility and geopolitical uncertainty, or capital formation in the midst of economic uncertainty.

Regardless, across our industry, firms must be nimble to meet their customers’ needs. This is certainly true in the private client and wealth management sector, which while not immune to uncertainty and volatility, continues to grow as more Americans plan for retirement with an increasingly holistic view toward the services they are seeking.

Ken Bentsen: Ken, you and your colleagues at Edward Jones have been quite vocal about the importance of advice and the evolving role of the financial advisor. Talk to me about that.

Ken Cella: You’re right, Ken. We know that client expectations are evolving, and so our approach to advice must evolve as well. We have an opportunity for financial advisors to continue to build and nourish relationships with their clients to understand how people’s goals have changed over the past few years.

Today, both pre-retirees and retirees are most interested in receiving guidance from a financial professional about protecting their savings and investments from inflation. This includes being advised on an investment strategy to withstand market volatility.

Therefore, we must gain a deeper understanding of what’s important to each person, and how we, as an industry, can help them achieve it by providing the highest quality advice, products, and service.

We need to be having conversations with clients around their concerns about the economy, retirement plans, shifting priorities as well as actions they can take to improve their well-being. And, as we continue to weather volatility, we need to help provide a sense of reassurance.

The value of financial advice has shifted from “transactional investing for someday” to “all-inclusive planning for now AND the future.” We need to embrace that shift in the finance industry by understanding deeply what matters to our clients and help them achieve their best life for today AND tomorrow.

Ken Bentsen: In addition to being the Chair of the SIFMA Board of Directors, you’re also a Director for the SIFMA Foundation, which is dedicated to fostering knowledge and understanding of the financial markets for individuals of all backgrounds. Fostering financial literacy is a priority for SIFMA members and it’s a priority for SIFMA. Our member firms’ critical support of this work empowers young people to thrive by preparing for wealth-building opportunities, college, and careers, carrying them from their earliest financial decisions through retirement. How do you see the current environment helping in that effort?

Ken Cella: We have such an opportunity to expand access to financial advice and help more people build financial resilience. At Edward Jones, we have been on a transformational journey to build new capabilities and re-architect our branch business model to deliver a more complete picture of wealth management. In 2020, we began a series of studies with Age Wave to gain insights into attitudes, aspirations, hopes and even fears of investors when it comes to retirement.

This collective body of retirement research has provided unparalleled insights into retirement – the journey, evolution and diverse paths taken in preparation for and during this life stage. What we learned is an important tool for understanding how – and when – to engage and assist our clients as they set important goals for their financial future.

We learned finding fulfillment in retirement was not just about making enough money to live out your days comfortably. People also prioritized their health, their families and the legacy they wanted to leave. Retirement no longer represents “the finish line,” but rather a whole new chapter in life. And retirement didn’t necessarily mean the end of work, but rather new choices, new freedoms and new challenges. Such insights have been invaluable to our firm as we continue to have a positive impact on our clients and the communities we serve.

More recently, Edward Jones conducted a study on GenNext, which represents 18- to 34-year-olds going through a life stage referred to as “emerging adulthood,” meaning they are no longer adolescents, but are the youngest of adults.

Currently, the majority of GenNext described their current financial situation as “surviving,” focusing on the short-term as it pertains to everyday expenses, budgeting and saving for large purchases. However, in just five years, most believe they will be thriving, with finances being the number one priority to help get them there. While only 12% of this group currently go to a financial advisor to discuss their finances, 41% said they plan to seek out a financial advisor someday. And the vast majority view financial advisors as a sounding board for ideas. Despite common misperceptions, only 20% reported using social media or influencers as sources of financial guidance. Even though they are considered the “digital generation,” 66% of GenNext prefer in-person interactions with their financial advisors.

This is a promising note for our industry, clearly an opportunity to provide more financial education and professional advice on a more personal level to help the next generation of investors get on the path to thriving.

Ken Bentsen: That is a great snapshot of today’s investor mindset. Turning back to the broader topic of SIFMA, how would you summarize the remainder of your term as Chair?

Ken Cella: Clearly, SIFMA, has a deep commitment to its role as the voice of the nation’s securities markets, and I appreciate and respect the work all of you do and am glad to be a part of it. We should never lose sight in our work of the overall importance of our capital markets. Healthy and efficient capital markets finance the real economy, allocate risk, and support economic growth and financial stability. Our markets connect everything we do, as capital flows through our economy and has real impacts on people’s lives. At the highest level, this is what guides our work, and it is what will guide me through the remainder of my term. As a leading voice in the industry, we have an opportunity to lean into the role of the steady, reassuring guide – reminding our members and the clients we serve to stay focused on the long-term and helping navigate the challenges we’re facing together.

 

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Learn More

• SIFMA’s Board of Directors
• SIFMA’s Committee Guide